May 30 (Bloomberg) -- Shares of Westfield Retail Trust, the shopping center operator managed by Australia’s biggest mall owner, dropped the most in a month after a vote to merge with Westfield Group’s local business was postponed.
The stock slid as much as 1.9 percent, the biggest decline since April 28, before trading down 0.3 percent at A$3.23 as of 11:30 a.m. in Sydney. Westfield Retail yesterday deferred a shareholder vote on the restructure after Frank Lowy, Westfield Group’s billionaire founder, said he would press on with a plan to split its domestic and global businesses with or without the retail trust’s support.
The proposal to create Scentre Group to own and manage the Australian and New Zealand businesses, and Westfield Corp. to run its global operations, received the support of 74 percent of Westfield Retail proxies before the vote was deferred.
The board of Westfield Retail postponed the vote, saying that Lowy’s comments materially changed the outlook for shareholders.
About 98 percent of Westfield Group shareholders voted for the proposal. The company needs the support of 75 percent of investors in both groups for the plan to proceed.
“Westfield Retail is paying too high a price for the operating platform,” Stephen Mayne, a spokesman for the Australian Shareholders’ Association, whose members together hold more than A$20 million of Westfield Group shares and A$10 million of Westfield Retail securities, said yesterday. “And it’s being taken up the risk curve with a lot more debt.”
Westfield Group shares were unchanged at A$10.85, and were up 7.6 percent this year. The benchmark S&P/ASX 200 Index lost 0.2 percent today. Both Westfield Group and Westfield Retail Trust were suspended from trading yesterday.
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